The eXchange in £384m float

Internet financial services firm The eXchange Holdings is aiming to raise about £155 million from a stock market flotation which would value it at £384 million.

The firm is taking the plunge into the London new issues market hot on the heels of Freeserve's £1.4 billion float, in a month that will prove a key test of British investors' appetite for Internet stocks and the online revolution.

The eXchange is offering 81.7 million shares, or about 40% of the enlarged firm, at between 170p and 207p per share in an issue underwritten by Warburg Dillon Read and Goldman Sachs.

The firm has received 12,000 requests for issue details from small investors, but executives said the issue was targeted more specifically at institutional investors.

About 150 presentations are scheduled before a final price and allocation details are released on 6 August, and the shares are expected to begin trading on 13 August.

The eXchange's chief executive Paul Lindsey is also seeking to distinguish his firm's niche from Freeserve's increasingly crowded Internet service provider area.

Freeserve's prospects took a knock when America Online said it had plans to compete in the free ISP arena.

'Our ship is a lot stronger. Freeserve is an ISP and we are the first vertical financial services portal anywhere,' Lindsey said.

'The timing of our float is entirely coincidental. We have been developing a new strategy for the last 18 months and we need certain capital to build on the success we have already demonstrated,' he said. 'They are just ahead of us at the moment but we have a fundamentally different business model, we have a revenue stream, we have market share and we have profits. It is a different story altogether and we will stand out on our own.'

Finance director David Chislett said the firm will use about £18 million of the cash raised to pay off debt, while remaining funds would finance product development and possible acquisitions.

It has been providing business-to-business services online since 1991 and has a modest track record of profitability.

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